Major General Muhammadu Buhari (Rtrd) became the Nigerian Head of State in December 1983 after a military coup that overthrew the democratically elected government of President Shehu Shagari.
In order to reform the economy, as Head of State, Buhari started to rebuild the nation's social-political and economic systems, along the realities of Nigeria's austere economic conditions. The rebuilding included removing or cutting back the excesses in national expenditure, obliterating or removing completely corruption from the nation's social ethics, shifting from mainly public sector employment to self-employment. Buhari also encouraged import substitution industrialisation based to a great extent on the use of local materials and he tightened importation.
However, Buhari's bid to re-balance public finances by curbing imports led to many job losses and the closure of businesses.
Buhari broke ties with the International Monetary Fund, when the fund asked the government to devalue the naira by 60%. However, the reforms that Buhari instigated on his own were as or more rigorous as those required by the IMF.
On 7 May 1984, Buhari announced the country's 1984 National Budget. The budget came with a series of complementary measures:
• A temporary ban on recruiting federal public sector workers
• Raising of Interest rates
• Halting Capital Projects
• Prohibition of borrowing by State governments
• 15 percent cut from Shagari's 1983 Budget
• Realignment of import duties
• Reducing the balance of payment deficit by cutting imports
• It also gave priority to the importation of raw materials and spare parts that were needed for agriculture and industry.
Other economic measures by Buhari took the form of counter trade, currency change, price reduction of goods and services.
0 comments: